There is an upcoming meeting of the 20 Premier League clubs next Tuesday and Wednesday to discuss possible changes to the current PSR (Profitability and Sustainability Rules).
Any changes to the current PSR will impact all clubs including Newcastle United, who are a little different from most clubs because they will have money to spend on transfers and the like up to the limit allowed by PSR or its replacement.
That’s not the case with other clubs in the PL.
The meeting follows one of the quietest January transfer months for many years, as clubs have been given a wake-up call by Everton being deducted 10 points in the league for not abiding by the rules.
Chelsea, Nottingham Forest and Manchester City are also being invesigated for PSR rules infractions.
There will be changes to the current PSR put forward and presumably some progress made to getting a better balance for the PSR.
UEFA’s current ‘squad cost ratio’ (SCR), is another approach and it limits clubs in UEFA competition to spending longer term to 70% of their revenue on wages, transfer fees, and agents fees.
There will be a gradual decrease in spending with SCR that will see the percentage at 90% in 2023/2024, 80% in 2024/2025, and 70% from 2025/2026.
The PL may go to that kind of model but increase the amount of spending to 85% of revenue – and maybe have it be at 85% with no gradual change.
Since we made £250M in our last financial year (through June 30th last year), we would be able to spend £212.5M at 85% of revenue and £175M at 70% of revenue.
At the meeting next week there will be discussions with no vote taken on any new rules.
It’s expected that the richer clubs like Newcastle will be in favor of the new deal but the poorer clubs in the Premier League will be against it.
The FFP originally was put in place by UEFA to limit the spending of PL and other clubs in Europe based on their revenue to protect those clubs who overspent and landed up in bankruptcy.
The Premier League CEO Richard Masters had this to say about possible new proposals in a select committee hearing in Westminster:
“We have some proposals out for consultation with our [Premier League] clubs about moving and aligning more with the UEFA system,”
“UEFA have spent two years changing its financial regulations away from something called FFP (Financial Fair Play) to something called ‘squad cost ratio’, which is a different calculation, more a wage to turnover type calculation.”
“Because over time we have historically aligned with UEFA. Because seven or eight of our clubs are in European competition each season.”
“We need to consider whether that is an appropriate move for us, how we do that, and when.”
It seems a good time to explore other PSR-type rules based on UEFA’s new SCR system, given the Premier League now has experience of things that work and things that don’t work.
And the rules are still two-fold.
One is to prevent rich clubs from going out and buying essentially new teams when rich owners take over, as Chelsea and Roman Abramovich did back in 20-3, while at the same time the rules limit poorer clubs so they don’t go bankrupt by overspending.
The experience gained over the last 10 years could help the Premier League come up with new rules that are more sensible than the ones that exist today – and may even work.
What do you think?